Should You Buy L&T Shares Now? Emkay Sets New Price Target of Rs 4,000 Amid Global Order Boom

In its latest research report, Emkay Global Financial Services has reiterated a ‘BUY’ call on Larsen & Toubro (L&T), setting a target price of Rs 4,000 per share, compared to the current market price (CMP) of Rs 3,587.

The brokerage expects the engineering and construction giant to capitalise on emerging opportunities in international markets and nuclear energy, while benefiting from robust cash flows and healthy order inflows.

Strong Prospective Pipeline Drives Optimism
In a recent interaction with L&T’s management, Emkay highlighted a 57% YoY jump in the company’s prospective pipeline, rising to $19 trillion for FY26E from $12.1 trillion a year ago. This growth has been largely fueled by a 135% rise in international prospects, now valued at $12 trillion, while domestic prospects remain stable at $7 trillion.

"The jump in the prospective pipeline is partially led by new opportunities like Offshore Wind (₹1.5 trillion), Gas-based Power Plants (₹500–600 billion), and Minerals (₹500 billion) in newer geographies such as North America and the Far East," Emkay noted.

International Business to Outpace Domestic Growth
Currently, L&T’s international business comprises 46% of its order book, but this share is projected to exceed 50% by next year. This shift is expected to lead to more stable working capital cycles and stronger cash flows.

“L&T is strategically placed to thrive in the Indian and Middle East markets, benefiting from strong capex growth and a diversified order book,” Emkay stated.

Nuclear Energy Revival: A Long-Term Catalyst
Nuclear energy is emerging as a significant long-term play, with governments globally revamping their strategies to adopt this baseload, emission-free power source. India, in particular, is targeting 100GW of nuclear capacity by 2047, backed by a $200 billion government outlay.

“L&T is one of only three Indian companies selected for Small Modular Reactor (SMR) technology transfer by the US Department of Technology, positioning it to lead nuclear energy commercialisation in India,” Emkay highlighted.

The government aims to develop at least five indigenously designed and operational SMRs by 2033, adding significant visibility for L&T in this segment.

L&T Share Price Target 
From a valuation standpoint, L&T trades at a core Projects & Manufacturing (P&M) multiple of 27x/22x its FY26E/FY27E EPS, which Emkay sees as attractive given the company’s projected 23% EPS CAGR over FY25–27E. The report also forecasts a return on equity (RoE) of 18% by FY28E.

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“With unmatched scale and capability, L&T is well placed to navigate short-term volatility in the capex cycle, while benefiting from long-term tailwinds,” Emkay concluded. The stock’s current valuation stands at a discount to its historical average (23x) and offers a favourable risk-reward compared to the broader industrial and infrastructure sector.
 

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